No-limit Weekend Calling Plan Set

Sprint Corp. Charges $25 Flat Monthly Fee

November 06, 1998|By Jon Van, Tribune Staff Writer.

Sprint Corp. Thursday launched an offer of unlimited weekend calling for $25 a month and pushed long-distance phone service one step closer to the kind of flat-rate fee that proved wildly popular with computer users and changed the on-line industry.

Sprint executives said that if the offer, which will also provide unlimited calling over the Thanksgiving holiday, proves popular enough, it may be expanded. Other telephone firms criticized Sprint's plan as costly, but did agree that the long-distance business is headed toward the one-rate model.

Tim Kelly, Sprint's marketing vice-president, said that just as Sprint's flat-rate, dime-a-minute plan introduced a few years ago revamped the industry's pricing policies, the new unlimited calling offer should reshape the business, too.

"We see this as precedent-setting in the long-distance segment of the business," said Kelly. "We see this as a platform that is extendable over time."

For consumers who spend more than $25 a month on long distance, Sprint's new plan looks good, said Becky Sachs, a spokeswoman for TRAC, a Washington-based consumer group that makes long-distance rate comparisons.

"Our sense is that it's a good deal, especially for customers who can be flexible about when they make calls," Sachs said.

While other companies said the rate plans they now offer are better for most customers, AT&T Corp., the largest long-distance company, will match Sprint's unlimited weekend calling deal for any customer who wants it, said Tom Hopkins, a Chicago-based AT&T spokesman.

"By our calculations, 95 percent of our customers are better off with other plans we already offer," said Hopkins, "but that means that 5 percent of our customers could benefit from a plan like this, and we will offer it to anyone who wants it."

Under the Sprint plan, customers pay the monthly flat rate of $25 to get unlimited weekend calling and also pay 10 cents a minute for long-distance calls made during the rest of the week. The offer is limited to voice calls, and customers who tried to use the service to hook up their computers to the Internet would be disqualified from the plan. Hopkins said that AT&T has a plan in place that charges customers a monthly flat rate of $5 and gives them nickel-a-minute calling on weekends and dime-a-minute calling the rest of the week, which works out to be cheaper for most people than Sprint's deal.

MCI WorldCom, which offers all of its customers nickel-a-minute calling on Sundays regardless of what rate plan they have, also criticized Sprint's new deal.

"The average customer spends less than $20 a month on all long-distance calls," said Brad Burns, an MCI WorldCom spokesman. "You'd have to spend eight hours of calling on Sundays every month on our plan to run up $25 in fees. Sprint's offer is clearly aimed at a niche market."

Qwest Communications Inc. in September launched a plan that charges customers a flat rate of $15 a month to have nickel-a-minute calling all the time. For most people, this will be cheaper than Sprint's offer, said John Taylor, senior vice-president of Qwest's consumer sector.

But despite their criticism, most people at long-distance companies agree that charging flat rates for unlimited service is probably on the horizon for their industry. The popularity of such plans was demonstrated a few years ago when some small long-distance companies offered unlimited calling for flat rates, said Jeffrey Kagan, an Atlanta-based telecommunications analyst. "They ran into problems when their capacity was reached and customers got lots of busy signals trying to make calls," said Kagan. "If the big long distance companies do this, I'd imagine that wouldn't be a problem."

Kagan termed Sprint's offer a "trial balloon" that may usher in widespread flat-rate pricing if popular.

The one impediment to flat rate unlimited calling is the fact that long-distance companies still must pay per-minute connection charges called access fees to local phone companies like Ameritech Corp.

"Some companies might offer unlimited calling and lose a lot of money because of access fees," said Qwest's Taylor.

But during the past year, companies have been adopting fixed-rate monthly access fees and have seen the per-minute fees drop. An acceleration of that trend would remove the biggest obstacle to widespread flat-rate unlimited long-distance offers, said Burns of MCIWorldCom.